Some Less-Explored Areas of Consumer Magazine Circulation

Consumer magazines have major circulation challenges, but amid all of the negative coverage about circulation in the past year are some points that seem to get little exposure and may be worth considering for perspective.

Trade and even general press frequently recap the list of circulation challenges, so let’s look at some others. We all know that newsstand unit sales have declined and that the mid-1990s governmental crackdown on stampsheet agent and other sweepstakes promotions dealt a severe blow to subscription sources. We also know that many magazines are meeting consumer resistance to subscription price increases, born in no small part from their own longtime practice of offering low introductory prices in order to maintain rate bases.

That said, here are points and questions for consideration:

h circulation sources, “God is in the details.” media buyers have stated in public forums that they know it is neither fair nor prudent in serving their clients’ interests to simply “write off” whole categories of circulation sources or promotions without assessing their value on an individual basis. The details of a given program – and the accuracy of how its subscriptions are reported on the publisher’s statement – are critical.

Buyers who examine sources closely know that subscriptions sponsored by third parties or sold in partnership with marketers that have a “natural fit” can be effective, legitimate ways to reach new readers who have potential not only to renew in future years, but to buy products advertised in the magazine.

If a Realtor serving a particular region sponsors some of a regional lifestyle magazine’s subscriptions, are these readers to be assumed uninterested in the magazine’s editorial and advertising content? If the nature of such subscriptions is reported thoroughly and accurately, media buyers can weigh their value and make informed decisions.

Are readers of sponsored subscriptions that are distributed in public places not of potential value as prospects for advertisers and publishers? Among the large magazines that are measured by syndicated research studies, readers-per-copy data is the make-or-break in many or most media buys.

Advertisers value audience reach, and it has been shown time and again that distribution in public places increases readers per copy, for obvious reasons. The agent’s methods and the accuracy of reporting on the publisher’s part are critical in assessing a given program.

Similarly, a publisher-generated subscription offer such as a two-for-one gift program that encourages existing subscribers to share their enthusiasm for a publication with friends or family whom they think would appreciate such a gift would seem to be simply smart affinity marketing.

Virtually every consumer marketing firm, whatever its products or services, uses sampling and/or price discounts in promotions designed to reach targeted prospects who then can be turned into loyal customers. Are magazines different for some reason?

Publishers want to make money on circulation. For decades, stampsheet agents tapped major segments of the reading population, yielding millions of subscribers who were quite renewable. When a few overzealous promotional mailings triggered the crackdown, the sudden loss renewable subscribers necessitated finding new ways to reach prospects.

But publishers want and need to grow circulation revenue and profitability, particularly after some tough advertising years. Hence the lack of a rush to sell subscriptions for a few cents, as some media buyers feared. And hence publishers’ eagerness to improve renewals (which are, of course, far more profitable than replacing subscribers) as well as to test new sources and offers and roll out the ones that prove viable, both in pure circulation economics and in delivering audience value to advertisers.

Are publishers making progress in this regard? I think this argument can be made, based on efforts on several fronts, such as:

· Investing in the editorial product. There is a surge in ongoing research (much of it Internet-based), including reader surveys and cover tests, to continually hone editorial content/design and support new-subscriber and renewal dynamics.

· Developing new sources, including partnerships with outside marketers and affinity retailers. Examples are Time Inc.’s successful program in which Sports Illustrated and Entertainment Weekly subs are sold to Ticketron customers, and sales of Parenting subs in a maternity store chain. Publishers also are investing in developing circulation sources such as the Internet (which now accounts for 5 percent to 10 percent of subs for more than one large publisher), strategic free-to-paid sampling programs and “combination offers” of two magazines (or a magazine and a newspaper) that have editorial/audience affinity.

· Developing “continuous service” subscriptions. Practiced responsibly, with clear disclosure of the nature of the offer and careful compliance with all cancel requests, CS is a renewal convenience for subscribers that also makes economic sense for publishers.

· Moving from “soft” to “hard” offers. In new-subscriber promotions, publishers have moved away from free-issue, credit-based offers in favor of offers that require the subscriber to pay upfront. Though most of these hard offers are discounted off the full “suggested” sub price, pay-up no longer is an issue, these new subscribers generally are more renewable and renewers generally are willing to pay somewhat higher prices.

Circ and editorial practices that improve publisher circulation economics while delivering solid subscribers should work to advertisers’ advantage in the long and short term.

Does a subscriber who pays more for a magazine “want” it more than those who paid less? Some media buyers, and even some large publishers (at least in their sales efforts for magazines that use less promotional pricing than others), say they believe this to be intuitively true. And many small- to midsize circulation special interest titles that are heavily or exclusively dependent on circ revenue have demonstrated for years that subscribers will pay fair prices for these publications.

On the other hand, circulation-driven magazines usually have been careful not to risk creating consumer resistance by putting out discounted offers, and so editorial relevance may not be the only reason their readers tend to be less price-sensitive.

Also, if media researchers or media owners have hard data that scientifically correlates price paid with the “wantedness” of magazines, it has not been released publicly to my knowledge. In one test conducted for a major magazine some years ago, a subscriber’s renewability was found to have no correlation with the original price paid.

It also can be argued that only magazines are assessed so heavily on the basis of price paid by the consumer. Given the escalating rates being paid for commercial time on network television (where audiences continue to decline), can publishers be blamed for wondering whether some kind of a disconnect is going on?

Similarly, can consumer marketers be blamed for being perplexed by some media buyers’ focus on the “average price paid” number on the statement, knowing as they do that accurately reported numbers on a circulation statement can actually go down in response to circulation practices. This might be perceived as improving circulation quality (such as increasing the number of multi-year subscribers) and that average price paid can go up as a result of practices that may produce less-renewable (and less-profitable) subscribers.

Other puzzling phenomena: Why will some consumers buy a magazine in a supermarket or other outlet several times per year when they could spend less to get all of the issues through a subscription?

Also, why do many stampsheet-generated subscribers renew? Publishers themselves renew these readers, often without a sweeps incentive. People may try a magazine because a sweeps hook gets their attention, but why would they renew it without that side incentive, unless they “wanted” it?

Pinning down “wantedness” is not easy. Perhaps some media researchers have found answers to some or many aspects of this challenge, but are keeping their findings proprietary. If so, perhaps they will be able to apply or adapt the same techniques to other media.

Or perhaps, as some have suggested, the advertising and publishing communities can agree to return to using circ statements and auditing for their originally intended purpose of core verification of a publication’s paid and nonpaid distribution, and build on this with other research. Perhaps with cooperation, the industry might even develop assessment metrics that are applicable to all magazines, not just those with larger circs.

Advertisers first and foremost must be able to rely on reported, audited data. If a subscription is reported as paid on a circulation statement, the circulation audit must be able to verify that the subscription meets the definition of paid, meaning that either the consumer or a third party/sponsor has paid at least 1 cent for it. That is why all professionally conducted audits require hard verification of payment, whether the payment is from a consumer or a sponsor.

As long as the nature of all sources and the number of subscribers within each are fully disclosed in reporting (from copy one), and fully verified in auditing, media buyers and media owners can engage in meaningful discussions about the value of any given source or marketing practice, and the demands of the marketplace will prevail.

Consumer magazine circulation reporting and auditing need to be more timely. Advertisers and media buyers are right to demand this.

Related Posts